How far can your dollar go?

The Consumer Price Index (CPI) is an average measure of price changes over time to help determine the dollar’s purchasing power; this index is calculated by the Bureau of Labor Statistics (BLS). They define it as “…a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services” (BLS 1). In laymen’s terms the BLS picks a selection of commonly purchased goods, called a basket; the prices of each good are then weighted and averaged. When we look at changes in this measurement we can gather useful information about the... Read More

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